Ethanol plant development getting closer

Thursday, December 23, 2004

After months of effort, SW Energy LLC is getting close to starting construction of a $70 million ethanol plant at the Perry location four miles west of McCook.

New attention was focused on the plant Wednesday when it was announced that the Invest Nebraska Board had unanimously agreed to award incentives to SW Energy. Those incentives, in the form of tax breaks, will start flowing to the ethanol company when at least 25 employees are hired at salaries of $28,378 and above.

Remember, though, said SW Energy's vice president, John Kugler, that those incentives will not kick in until the plant is built and in production. The same is true of $22.5 million in ethanol production incentives from the state, which were approved earlier this year.

Kugler has taken a lead role in the ethanol project, as have two other McCook men, Van Korell and Ron Friehe. They have joined with Minnesota investors and the project's originator, Al Voudrie, in an all-out attempt to get the plant built and in operation.

The project hinges on financing, which is now entering the final stages of negotiations. "We have been in contact with financial firms in the east, the south and in California," Kugler said. The SW Energy board is now considering proposals, and hopes to have a decision early in January.

If all goes smoothly, construction of the plant could begin by mid to late January, and be completed by the end of 2005.

"We've had great cooperation on many levels," Kugler said, expressing thanks to the Nebraska Ethanol Board, the Nebraska Department of Economic Development and Omaha area senators, who have been supportive of the project. However, he has been disappointed by the lack of prompt action by the Nebraska Department of Environmental Quality. "They've been slow and unresponsive," he said. "DEQ is a detriment in a state which is otherwise very supportive of economic development."

Still, Kugler is hopeful that the final parts of the project can be put together, and that construction of the $70 million plant can begin early in 2005. In combination with the plant in Trenton and one planned at Cambridge, that would make Southwest Nebraska a leader in ethanol production in Nebraska.